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TMI Blog1994 (4) TMI 164X X X X Extracts X X X X X X X X Extracts X X X X ..... viz. Lakshmi Industries and Lakshmi Engineering Traders. 2. Shri Narayanan, the learned counsel for the appellants, submitted that on an allegation that M/s. Lakshmi Industrials is a fictitious creation of the appellants, the authorities held that the clearances effected by M/s. Lakshmi Industrials should be clubbed by 50% to each of the appellants and in this view the proceedings instituted resulted in the impugned order. The learned counsel contended that so far as M/s. Lakshmi Industrials is concerned it is admittedly a partnership firm which has been created in accordance with law and which has been granted a Central Excise licence. The fact that the two proprietors joined together to create a partnership firm would not render the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ging out of the manufacture in the units of the appellants and, therefore, they were not contesting the duty liability in so far as the waste and scrap are concerned. The learned counsel submitted that in the impugned order a finding is given against the appellants on the ground that appellant M/s. Lakshmi Engineering Traders procured an order for supply of 32 Nos. of wet grinders, a part of which order was met by M/s. Lakshmi Industries, the other appellant. It was submitted that this has absolutely nothing to do whatever with the firm viz. M/s. Lakshmi Industrials with which we are concerned in the appeals. Since the unit belonging to the son alone has the capacity to manufacture that type of wet grinders, there is nothing wrong in law fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence available on record is that the firm in the name of Lakshmi Industrials is created by the two partners, who are father and son and who are the appellants herein. Even though there is no evidence for financial transaction inter se between the created firm and the appellants firms, the fact that all the three units manufactured and cleared goods with the same brand name would be a circumstance that would point to the conclusion that the firm was created only for the purpose of evading payment of duty and wrongly availing the concession and in this context the corporate veil can be said to have been lifted to find out the real position. 4. We have carefully considered the submissions made before us and have gone through the entire r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating authority entertained a grave suspicion that because of the father and son joined together and created the firm M/s. Lakshmi Industrials it must have been done only for the purpose of tax avoidance. In our view from the evidence available on record from this circumstance alone it would be difficult to hold that M/s. Lakshmi Industrials, a firm created, was only for the purpose of avoidance of law. Therefore, in the absence of any evidence we are inclined, to, hold that the clearances of M/s. Lakshmi Industrials cannot be clubbed with the clearances of the units of the appellants. Even accepting for the sake of argument the reasoning of the learned adjudicating authority, it would be seen that if M/s Lakshmi Industrials was a fictitiou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers between the two proprietary concerns; (3) there has been a common use of the brand name. We observe that there is no allegation that the partnership concern did not have the adequate machinery for the manufacture of the wet grinders, which have been shown as the production of the said firm. The learned lower authority has placed heavy reliance on the partners being father and son of the concern and also the fact that the firm was created at a time when the proprietary concerns were about to cross the exemption limit. We observe that so far as the legality of the partnership concern is concerned that is not in doubt and nor any finding against the existence of the firm as such has been given. There is also nothing on record to show tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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